Semi-Custom Business Unit Creates New Revenue Stream For AMD

Advanced Micro Devices (AMD) has an extensive intellectual property (IP) portfolio. The company has a range of products from CPUs and graphics cards to video acceleration hardware. It is also the only other major player to have a license to build chips with the x86 ISA. With the launch of its Semi-Custom Business Unit, AMD plans to take advantage of the engineering experience and patent portfolio to create a new revenue stream. AMD will work with other companies to create customized processors that integrate custom IP cores and technology but use AMD's existing products as a base to cut down on engineering time and R&D costs.

The first such customized chip is the System on a Chip used in Sony's PlayStation 4 gaming console. AMD intends to market its modular SoC technology and custom IP integration services to makers of set top boxes, smart TVs, tablets, PCs, networking hardware, and High Performance Computing applications. AMD argues that using its Semi-Custom Business Unit to create a customized SoC is cheaper and faster to design and produce than a fully-custom design, which makes sense since most of the engineering work is already done. AMD could stand to make quite a bit of extra money here, especially if it can land design wins for governmental and industrial design contracts. Intel's x86 license scarcity may actually benefit AMD here, in fact.

AMD's Semi-Custom Business Unit consists of an engineering team led by AMD Corporate Vice President and General Manager Saeid Moshkelani. I think doing this is a smart move for the x86 underdog, and it will be interesting to see how well the division does for the company's bottom line.